Strategy Institute

Choosing a President Based on Planning

A lot of my recent work has been about how the techniques of strategy work beyond the limits of planning. This is an concept that is fairly new, at least I have never encountered it before in a formal form in business literature though, of course, there are a lot of famous lines, starting with Sun Tzu, about how plans don't survive the first contact with the enemy. However, I am happy to see that people recognize through simple commonsense that planning isn't everything.

Hillary Wins in NH: Testing Dynamic Environments

Planning doesn't work in competitive, external environments, for a variety of reasons (discussed here), but one of the central reasons is the problem of limited information (discussed here). One of the tools planners use to try to predict these dynamic environments is "market" testing. However, the success of such testing is limited.

The Economy Gap Between Perception and Reality

The New Year seems like a good time to look at the economy. Strategic positions have an objective dimension in physical world and subjective dimension in the minds of the public. These physical and mental aspects of a position are complementary opposites of a single system. One changes the other in a constant cycle. The larger the gap between any physical reality and our subjective impressions of it, the poorer job we do predicting the future and the more volatile the future becomes.

A New Year

Strategy teaches that all positions are both objective, rooted in reality, and subjective, rooted in our impressions and imagination. The New Year is an imaginary boundary, but a useful one that beckons us to start changing our position for the better. The mistake is thinking that change comes in an instant, with a tick of the clock. Changing positions is a gradual process that forces us to move forward and preventing us from sliding back.

Teach Strategy to Teenagers

Sun Tzu taught that strategic skills must be taught. They are not instinctive. A recent study comparing the decision-making of teenagers to adults drive home this point. An interesting aspect of this article is the inability of the scientists to express the concept of strategic decision-making. The closest they can come is to call it "the gist" of the situation.

Misunderstanding Trends

Sun Tzu's strategy teaches us to see beyond change to the hidden systems driving change. Dynamic systems consist of complementary opposites as the driving forces that both compete with and feed off of each other. In any environment, the most dominant such forces are called "climate" and "ground," the force of change and the base of stability. New systems tend to shift dramatically back and forth before they find stability between competing forces.

Natural Reversals

One of the strangest predictions in Sun Tzu's strategy is that conditions progress to the point where they naturally reverse themselves. Part of the explanation is that systems, that is, processes put in place to accomplish a goal naturally overwhelm the goal for which they were designed. We see this all the time in human institutions. For example, here is an interesting article about how the landmark preservation laws, originally designed to save old, beautiful buildings, are now being used to preserve new, ugly buildings.

Conflict Politics

Sun Tzu separated the concept of "attack" from that of "conflict." While all strategy requires "attack," the best strategy avoids conflict. In Sun Tzu's strategy, "attack" means being on offense, typically, moving into new territory. Conflict means violent confrontation with an opponent. Conflict is inherently expensive, which makes real success, that is, making victory pay, more difficult.

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